Financial planning for the Smith family Case Study

Financial planning for the Smith family - scale Study ExampleThe author has presented that the Smith family has got a very tricky situation and their financial goals argon a bit unrealistic. This is because the family wants to set aside $350 per month for their childrens college education. This from my point of view is quite racy because it will amount to$ 4,200 annually. yellow-browns goals on the other side are still non realistic. This is because she says she wants them to save $100,000 on their childrens school fees. This is very unrealistic because at the moment, their salary per year can non correct add up to $100,000 per year. The family has not put down in calculation the amount of money that they acquire for their kids education when they get to college. Luke for example, they cede no idea how much they will pay for his college education then they cannot plan for the future goals and how much ex make forly they require. Amber is thinking of overtime work so that she gets peculiar(a) money for luxury items. They have made plans for a vacation, a pertly home theatre system, nigh new custom furniture and a different car for Joel. They want to apply for a new credit card with a limit of $50,000. The family has got so many plans for the extra money that they have and have forgotten the most basic things like their childrens future education and they want to pump so much money into their luxury life. They want to buy a new car which according to me is not that necessary at the moment simply because the car that they have can be easily repaired and use as they continue to save (Fedorowicz, 1977).. The Smith family has got a mortgage house and their balance on the mortgage is $131,000. They purchased the house 5 years ago by paying a deposit of $200,000. Borrowing $ cxl,000 and apply $60,000 that Joel received from his late grandfather. The following information shows the familys financial information. This will help or act as a guide to preparing a good balance sheet and a financial statement. Electricity, water, sound services, and garbage pickup $225 Natural gas $125 Mortgage payment $877 Home insurance $ one hundred fifty Home security $55 Groceries $750 Telephone, long distance calls and home Internet $90 Cell phones/Smartphones $140 Car give payments $520 Car gas, maintenance, and insurance $430 Clothing $200 School programs and dues $150 fryrens programs $850 Restaurants $450 nigh(a) minimum credit card payment $174 Other Church donations $50 $100 Notes Expenses for the childrens programs imply (per month) ? Karate $120 ? Gymnastics $160 ? Piano lessons $225 ? Guitar lessons $125 ? Hockey $220 RRSP contribution room carry-forward for 2012 ? Amber $95,300 ? Joel $25,200 As long as Landon remains under the age of six, the family will qualify for Universal Child Care Benefit payments of $100 per month, which will increase total income. Family assets and liabilities funds $850 Chequing account 1,300 Current nest egg 2,200 Home (market value) 300,000 Mortgage 130,924 Home furnishings 5,500 Joels car 1,500 Ambers car 18,000 Car loan 13,500 Credit card balance 5,800 Amber and Smith FAMILY BALANCE SHEET ASSETS THE CURRENT ASSETS Current Assets Cash in bank Current savings 2,200 0 Stock, Mutual Funds 0 Pension design 0 Life Insurance - surrender value 0 RESPs 120,500 Other Current Assets 0 aggregate CURRENT ASSETS $122,700 LONG TERM ASSETS Business property, real estate Personal real estate 19,500